Aside from its amazing culture, stunning beaches and delicious cuisine, there is another reason why Lisbon is competing as one of the most vibrant and exciting cities in Europe. Lisbon’s start-up scene is thriving and with investment from the government and strong support from the private sector, this hidden gem of a city is really starting to garner attention not just from tourists, but also from young entrepreneurs around the world.

The vision of Lisbon as a premier start-up city began nearly a decade ago. The Mayor of Lisbon at the time, António Costa, who is now the Prime Minister of Portugal, introduced Startup Lisboa. This incubator project is located right in the centre of the city, occupying what were historic buildings that had fallen into disuse. Its aims are to:

“Support the creation of companies and entrepreneurs in their first years of activity, to promote job creation, and aid the urban, social, and economic vitality of Lisbon.”

Over the last seven years, its success has been extremely impressive. It has supported around 400 start-ups, created 3,500 jobs and worked with entrepreneurs from more than 40 different countries. Well-known examples of companies that were assisted by Startup Lisboa include Uniplaces, a market leader in student accommodation which I myself used during my time spent in Lisbon. Startup Lisboa is just one of several incubator programmes that are supporting the growth of the various companies trying to establish themselves in Lisbon.

Another important factor has been the Startup Visa, which is a residence visa scheme for entrepreneurs, aiming to attract investment, talent and innovation capacity. This was the first of its kind within Europe, demonstrating the forward-thinking attitude of the Portuguese government. Other visa settlement plans such as the Golden Visa have helped to bring foreign capital into the country, attracting nearly €5 billion of investment into Portugal since the scheme’s creation in 2012. Although a disproportionate amount of this investment has gone into property, it has still helped Lisbon to attract both smaller start-ups and bigger tech players. For example, last year, Google built a new support centre in Oeiras, on the outskirts of Lisbon, creating 500 jobs and establishing Lisbon as a hub for their operations in Europe, the Middle East and Africa.

Lisbon, and indeed Portugal, have also harnessed recent political developments to their advantage. Portugal IN is a temporary task force created by the government to capitalise on Brexit uncertainty. Historic links between the countries, regular flights, widespread knowledge of English, a similar time zone, and the British tourist’s partiality to a Portuguese package holidays are all strong motivators for British companies to expand to Portugal in these times of European uncertainty. Furthermore, rent prices and the cost of living is significantly lower in Lisbon than in London. Unlike some other European business hubs, Lisbon’s culture is one of its main draws and despite its smaller size compared to London, it more than makes up with its sunshine, vibrant society, relaxed atmosphere and spirit of work. In a world where work is becoming more agile and mobile, factors such as quality of life are becoming increasingly important in deciding where a business or employee should be based. In this way, Lisbon has and continues to develop an edge over its European counterparts.

In another significant move for the Portuguese capital, Web Summit, the largest tech conference in Europe—to which The Pangean was a media partner this year—has decided to move from Dublin to Lisbon for the last few years, thereby helping to establish the legitimacy of Lisbon as a key player in the technology sphere. Developments in the Portuguese education system have helped to support the political and social changes mentioned earlier. Focus on technology skills and engineering, coupled with the relatively low costs of living have created an abundance of local skilled labour for these domestic and international start-ups. Indeed, Portugal ranks very highly in government expenditure on education, female representation in the labour force and availability of skilled labour.

This rise in the start-up scene has been made all the more important due to the current state of the economy in Portugal. Indeed, there are some critical issues on a national level. GDP per capita lags considerably behind other European countries; in 2018, it was nearly $10,000 less the EU average. Wages too have remained far below Western averages. Though it can be said that this cheap labour is part of the reason why international companies have been willing to invest in Portugal. Rising rents due to tourism and economic expansion in cities such as Lisbon and Porto are pushing locals out of the city. There has also been a lack of public investment, and anyone who has lived in Portugal will be able to cite the problems with outdated, inefficient infrastructure.

With all that said, there is cause for optimism. In recent years, the economy has shown consistent growth and unemployment has fallen from the high of 17.4% at the beginning of 2013 to a decent 6.6% as of September 2019. Household disposable income is rising at a rate of 2.9%, a figure which is higher than the UK, US, Denmark and Sweden. Moreover, the emergence of this exciting start-up culture can only serve to improve the Portuguese economic outlook and help modernise this Iberian economy.

As is stands, it seems that comparisons between Lisbon and Silicon Valley are only set to increase, with the Portuguese capital heavily promoting the image of a city attractive for its natural beauty and business opportunities. With Lisbon based start-ups raising hundreds of millions of Euros in investment, the favourable economic and political environment promoted by the local and national government has and continues to be successful, with the start-up boom in Lisbon here to stay.